Or, if you will, one of my own hobby horses coming for a ride: from E.J. Dionne at the Washington Post, via Hullabaloo:
Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy. [...]
… in the enthusiasm for deregulation that took root in the late 1970s, flowered in the Reagan era and reached its apogee in the second Bush years, we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument — when it works. But the free market is just that: an instrument, not a principle.
Complicated, likely with unexpected side effects but a general purpose principle would either be hard limits, or transparency taxes on leverage. Look back at the financial crisis’s for a long time, and see leverage, excessive borrowing as a core factor in capitalist failures. High leverage has an intrinsic moral hazard.
From a different perspective, usury as an evil (per several major religions) is not just a personal evil charging individuals too much, it can also be an H bomb of financial system destruction.
L DeGroff
March 21st, 2008